New Zealand Foreign minister Murray McCully returned from the Tamil-led north of Sri Lanka last night and indicated he believes New Zealand should not support an independent investigation into war crimes.

Shortly after his return to Colombo, McCully signed a dairy co-operation agreement with his counterpart Professor GL Peiris, worth about $2 million.

Earlier in the day, he laid the foundation stone for a milk chilling plant at Mullaitivu, the scene of one of the civil war's bloodiest battles, in January 2009.

Last night, he also launched an All Blacks supporters club with President Mahinda Rajapaksa's son Namal, captain of the national side and an MP.

As world leaders converged on Colombo for the biennial Commonwealth Heads of Government meeting this weekend, there is growing momentum for an international inquiry into alleged atrocities carried out in the final months of the 26-year conflict, which ended four years ago. The New Zealand government is yet to back calls for an inquiry.

McCully rejected a suggestion it is a deliberately soft stance to protect burgeoning dairy trade with the island nation.

"No, it's not. And I don't think that our stance is soft by comparison. We sit pretty much in the middle of the spectrum," he insisted.

McCully returned from his fact-finding mission full of praise for government investment in infrastructure, such as roads, housing and small farms. He also believes elections, held in September, were progress.

"The good news is that clearly four years after the fighting there is a more settled environment in which people can go about building their lives and there is plenty of evidence of that happening," he said.

But he said there is a "significant" lack of trust between Tamils and central government, which will hamper devolution.

And he said there are concerns about the number of soldiers that have remained in the area. " I think there is a concern about how long lasting it might be."

He stood by New Zealand's decision not to boycott the summit, like leaders from Canada, Mauritius and India.

"I'm not endorsing the government's reconciliation efforts, I've pretty much done the opposite ... the view expressed by the human rights groups that more should be done, and more quickly, is pretty hard to argue with," he said.

"We've tended to put more emphasis on the rebuilding process because we think that it can materially effect people who are there in reasonably different circumstances but that doesn't diminish the need for us to ensure that there is an ... accountability process."

McCully denied he was offered a sanitised glimpse of northern communities. "We went where we wanted to go not where the government told us to go."

He said it was a fact of life that if New Zealand was to help people in the north, it would have to work with the government.

Key is due to meet with President Rajapaksa tomorrow and has pledged to raise Sri Lanka's human rights record. He will spend much of the weekend lobbying for a seat on the UN Security Council.

British Prime Minister David Cameron also undertook a tour of the north yesterday.(Fairfax NZ News)